Channel 10 has lost the rights to two of its top shows, Modern Family and network stalwart The Simpsons, after negotiations with rights holder 21st Century Fox stalled.
On the face of it, it looks like the Murdoch-owned Fox Studios is throwing its toys out of the cot after the Lachlan Murdoch/Bruce Gordon bid for Channel 10 was unsuccessful, and the network joined the stable of American network giant CBS.
However, it’s more complex than that, and the Twitterati who fear that this spells the end of Channel 10 are wrong.
After all, Modern Family and The Simpsons haven’t exactly been the lifesavers Channel 10 has needed in recent years.
There are three issues at play here.
The first, and arguably the most important, is that Australian free-to-air broadcasters have been paying through the nose for years to access content from the American broadcast giants.
Part of the reason Channel 10 has hit the skids is because of so-called “output deals”, where broadcasters must pay a fortune to access a few standout programs, and are stuck with the bulk dross they are forced to buy at the same time.
It’s reported that these deals with Fox and CBS cost Channel 10 $100 million a year.
Channel Seven and Channel Nine have also been renegotiating similar deals for some time – with the aim of buying individual programs instead of being forced to buy in bulk.
The local free-to-air networks have more power these days because output deals are outdated. They worked best in the pre-internet days when audiences couldn’t use streaming services like Netflix, or could pirate overseas content.
Secondly, all Australian free-to-air networks are opting for more local content – partly because it differentiates them from streaming content. The significant ‘output deal’ money is better spent buying live sports rights or investing in local shows.
The third factor in this is that CBS (the No.1 all-demographics network in the US) has made it clear it is interested in making Channel 10 successful for the long haul – not merely preparing it for sale once it has turned it around.
And that gives the new Channel 10 a huge advantage because it presumably will eventually (as other deals expire) have first-call access to the vast library of CBS shows.
It will also reportedly give Australian audiences access to CBS All Access – the network’s subscription streaming access, which offers full, current seasons of shows like NCIS and the new edition of Star Trek, for example.
What will be interesting is what impact the CBS/10 deal has on the other Australian commercial networks. Will CBS’s The Big Bang Theory stay with Channel Nine? And when will Channel Seven lose the rights to The Amazing Race?
This is not about a Murdoch dummy spit. This is about the long-overdue shakeout of expensive US deals and the rise of demand for distinctive local content.